Monday, April 6, 2015

The Crowdfunding Exemption: Three Years and Counting

Yesterday was the third anniversary of the JOBS Act. President Obama signed it into law on April 5, 2012. The JOBS Act, as regular readers of this blog know, requires the SEC to adopt rules to enact an exemption for crowdfunded securities offerings. The statutory deadline for the SEC to do so was December 31, 2012. The SEC proposed the required rules on October 23, 2013, but it still has not adopted them.

It is now

  • 1096 days since Congress passed the JOBS Act
  • 826 days since the deadline for the SEC to adopt the required rules
  • 530 days since the SEC proposed the rules

. . . and still no crowdfunding exemption.

If I treated my tax returns like the SEC has treated the crowdfunding rules, I would be in jail.

SEC Chair Mary Jo White has recently said that the SEC hopes to finalize the rules by the end of the year. I certainly hope so.

C. Steven Bradford, Corporate Finance, Entrepreneurship, Securities Regulation | Permalink



Posted by: Tom N. | Apr 7, 2015 6:10:09 AM

OK. I cannot disagree that the wait has been too long. But, as you probably know, I actually place blame on the U.S. Congress for writing legislation that ties the SEC's hands in many ways that make regulating under the law tricky, including in generating appropriate cost-benefit analyses. Imho, Congress has essentially set the SEC and Title III up to fail here.

On the other hand, if the SEC had shown more activity to assist small businesses in obtaining financing, and had put more into working on a better crowdfunding initiative, then maybe Congress wouldn't have needed to act . . . . [sigh]

Posted by: joanheminway | Apr 15, 2015 7:55:09 PM


I also think Congress could have done better, but in a different sense. I think Congress simply should have created an exemption that didn't require SEC action, giving the SEC the ability to impose additional requirements if it wanted to. I guarantee that, if the exemption was immediately effective, the SEC would have acted much more quickly to add additional conditions. But, of course, that would have required substantially more work from Congress than the few days that the enacted version of Title III took.

Posted by: Steve Bradford | Apr 16, 2015 5:11:45 AM

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